Fire Bill Gates? Another Exhibit in Investors’ Anti-Microsoft Case

A trio of Microsoft investors want Bill Gates on a shorter leash. And that’s the clearest sign yet of the yawning divide between Microsoft leadership and the company’s owners.

Bill Gates

Reuters

Reuters reported late Tuesday that three of Microsoft’s big stockholders are pressing the company’s board to depose Gates — co-founder and spiritual leader — as chairman of the board.

The dissidents, who combined own more than 5% of Microsoft’s stock, are pressing their case now in part because of Gates’s position on the four-man board committee leading the search for a successor to CEO Steve Ballmer, Reuters reported.

A spokesman for Microsoft declined to comment.

Investors carrying a “Fire Bill Gates” banner are likely tilting at windmills. Microsoft has been relatively immune to stockholder demands historically, though it did open up a board post recently for the hedge fund ValueAct Capital. (It remains to be seen whether that was a clever move to co-opt an investor advocate, or a sign that Microsoft is under pressure to take investors views into account.)

Until recently, Ballmer himself has borne the brunt of criticism for Microsoft’s lagging positions in mobile technology and online software, and for a stock price that hasn’t budged even as profits soared during his nearly 14 years in the captain’s chair.

But in the weeks since Ballmer announced his retirement, even some of Gates’s supporters have whispered that he should be held more accountable for Microsoft’s stumbles. The still-unknown role Gates played in Ballmer’s surprise announcement has only stoked the theory that the founder is still the man behind the Microsoft throne.

The Gates grumbling also reflects a deep divide between what investors want from Microsoft, and what the company’s leadership thinks is the best path. It’s almost like they’re talking about two different companies.

Stockholders want Microsoft to give up on consumer businesses like Xbox and smartphones, hire as CEO a disciplined manager like Ford chief Alan Mulally, and generally give a shorter leash to Gates and his allies.

People close to Microsoft and its board are dismissive of such views, generally believing these investors to be misguided about the long-term benefits of breaking up the company or doling out big chunks of its cash stockpile to investors. Microsoft’s board also has endorsed a stay-the-course strategy, giving the next CEO less room to maneuver.

Still, there is one side effect of the sudden spotlight on Gates: Microsoft’s directors are facing even more pressure to not allow the founder to dominate the search for the next CEO. In a recent interview, the man helping to lead the search fired back at such claims.

“I have enormous respect for Bill,” John W. Thompson, the former Symantec CEO, said. “He is a brilliant man who built an unbelievable company. But I didn’t accept the role on the board or the role as the lead independent director to be Bill’s pawn, by any stretch of the imagination.”